Posted by: Rob Hof on July 27, 2005

Credit Amazon.com with finally reversing a bunch of disappointing earnings reports with a strong second quarter. It looks like free shipping and the new Amazon Prime program, which offers free two-day shipping for $79 a year, sparked sales growth. And strong sales by outside merchants selling on the site, for which Amazon collects high-margin fees, shored up profits.

Or so we’re left to assume. But if there’s a dark cloud inside the silver lining, it’s that Amazon remains something of a black box, as Piper Jaffray’s Safa Rashtchy puts it in an Associated Press story. Amazon declines to break out dollar sales by outside merchants. It discloses the percentage of unit sales, but not the number of units. It won’t reveal how many people have opted for Amazon Prime, nor what impact that program has had on sales or profits.

To make matters worse, at least for impatient journalists and investors, investment bankers are shutting down a key source of information on earnings reports. I found only one analyst who would talk to me about Amazon after the earnings report, the rest saying they can’t, or at least won’t, make comments before they publish reports. That’s not specific to Amazon, but the upshot is that by the next day, those reports will close to useless to the average investor, since the stock has already made its move.

Understandably, Amazon wants to reveal as little as possible to avoid helping competitors divine ways to chip away at its lead. But investors—that is, the owners of the company, and I don’t just mean Jeff Bezos—may deserve just a little more transparency. Every time Amazon reports a quarter, the stock gyrates wildly down (mostly) and up (this time). With a little clearer view of what’s driving the business, the stock might not be so volatile—and investors big and small would benefit.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.